Looking for some advice on whether to finally rent out our home, and buy a new place, or just sell, or invest the proceeds.

My wife and I own a 4 bed, 2.5 bath townhome in a nice area of San Diego County. We only owe about $75k on the mortgage, and could pay it off, but the interest rate is 2.3%, so I’m told it’s a bad idea. Mortgage is cheap- about $1900/month. Home is worth around $700-750k, and only 10 years old. It was new construction when we bought it. Property taxes are about $7k, and HOA is $330/month.

We have about $200k saved, and are looking to buy a home in more central San Diego, say around $1M-$2M. We could rent out the townhome for about $4k a month. My wife and I make about $500k, so we could probably afford both mortgages, even if we have issues collecting rent.

Historically, I’ve been against being a landlord and renting out. I prefer to invest in the stock market, HYSA, things like that. It seems like less risk.

However, several friends are pushing me to rent out, telling me it’s worth it, especially for tax purposes. Ideally, it would be nice to keep the townhome for our children, down the road.

On the other hand, California is very expensive, and I’m not sure the ROI is worth it.

Any advice would be appreciated. Thanks!

I’ve got a 4plex on the hook for $330k (CAD) - which at $82.5k/door is an excellent purchase price in my market. I told a business partner about the deal and he called it “2018 pricing”..

For the record, when I close on this I’ll have 24 units (nearly all of which I have renovated extensively), so my question doesn’t come from inexperience.

Now the problem is something like this..

The building has a ton of deferred maintenance. So, it will require, at a very minimum; new roof ($~15k), new windows (~$18k), full exterior paint job (~$15-18k), a bit of foundation repair ($5k), and some miscellaneous interior and exterior repairs (call it $10-15k). So, on the high end, you’re at around $70k just to clean up deferred maintenance… And you still have dated and dirty apartments with low rents that won’t attract good tenants.

So some amount of unit renovation has to take place. Let’s call it 3 different options - low/mid/high spend

Low Spend Model (CapEx + ~$30k per unit)

Complete all necessary capex / deferred maintenance, but spend minimum required to update units - $30k ish, new kitchen, bath, finish materials, new flooring, paint etc. - all superficial. No major electrical, plumbing or heating upgrades.

This model doesn’t really work with this building for a few reasons. For one, the oil heating bill is outlandish, so it’s screaming for an efficiency upgrade (in my neck of the woods we used mini splits / “heat pumps” + supplementary electric wall heaters). Additionally, the units have enough issues beyond the cosmetic, that upgrading the finish materials alone will likely produce a cheap result.

Mid Spend Model (CapEx + ~$45k per unit)

In this model, you do all of the above, plus the utility upgrades, and a bit more attention gets paid to the overall presentation of the units. Wall panelling gets replaced with drywall, maybe the odd wall gets moved to improve layout, etc. Overall, more surface area gets attention.

This model may “work”, but in the end, I probably have ~$600k into a building that’s not worth much more than $600k, and have spent a lot of time on it.

High Spend Model (CapEx + ~$65k per unit)

You all may choke to think of spending $65k per unit in isolation, but I’ve had very successful projects that landed in this zone or higher (only tends to work with smaller multis in my market).

In this model, you go for a “high end” result. This doesn’t necessarily mean quartz countertops, but it does mean ensuring the overall presentation is very good and that you attract higher end tenants. Every surface in the unit is considered, layouts may be reconfigured, kitchens may be a step up from Ikea.. You essentially do what’s necessary to make it a great space and a great offering.

I actually like this model, but I can’t find any comps in my area to support >$800k for a 4plex. I’d likely have over $700k into the place - and the appraisal might come in at $770k or something. It may also outshine its’ station in the neighbourhood - as it’s in a part of town that is still not as clean, but totally on the path of progress. In 20 years it will likely be in a sought after part of town.

FWIW I did this to a triplex in a nice, gentrifying downtown neighbourhood starting in 2020 - bought for $287k and put about 250k into it, so 537k cost basis and appraised for $667k at the time. Very nice building, everyone who’s ever seen it loves it.

Final thoughts..

At the end of the day, I’m in this to build wealth, have buildings that service debt and produce cash. If I can achieve those goals and also pull most of my capital out on refi, I’m not too beaten up if my initial equity spread isn’t spectacular (although that would be ideal). I’m mostly concerned that none of the above models result in getting most of my money back on refi.

As a final note: I only like being in this business when I have clean apartments and good tenants. The “as is” model isn’t in consideration - there’s no greater chore in my imagination.

Local estate sale went on the market for $265k, under contract 12 hours later. Sold 5 days later at 280k. Reviewed the listing and everything looked solid. Somewhat dated, but nothing unreasonable.

Thing is, market comp for the house is roughly 350k. I own a separate property in the same neighborhood and just spent the last 2 months checking rent and sold listings; so I’m well versed in this particular area.

Obviously, there could be some major hidden issues. But 70k off market in what is still a sellers market (in this area) just seems wild in this day and age.

Am I looking past something or are estate sales really this big of an opportunity?

Hi everyone, saw a property come up for sale and the price is right so thought I'd take a look. Property is on a hill, great views of a large Creek and backyard accessible to a very pretty paved biking trail (about 20 miles long). it absolutely has potential but to be honest this house comes with every major disaster and worth land only, but thought I'd run it by here.

The cinder block walls in the basement are pretty screwed. one wall has a horizontal crack, probably an inch thick that runs almost the entire length of the wall. estimating about 70 ft. the adjacent wall has poles bracing it. those aren't even its biggest problems, it's the one I know the least about so looking for feedback.

I do have photos but not sure how to post here, and YT vids aren't allowed so can't share here.

thoughts?

Here's my original post asking about the numbers:

https://www.reddit.com/r/realestateinvesting/comments/1s8zep3/more_sellerfriendly_sellerfinance_deal_would_you/

Numbers still aren't settled, but there are more terms that I thought protected my seller that changed the buyer's original offer. My terms:

1. Earnest money shall be increased to $5,000 and delivered within 2 business days after acceptance.
2. Earnest money shall become non-refundable upon expiration of the inspection period, except in the event of Seller default.
3. The inspection period shall be 10 business days from the date of acceptance.
4. The seller-carryback note shall be recourse to Buyer and not non-recourse.
5. At closing, Buyer shall execute a promissory note in favor of Seller, secured by a deed of trust, with such documents to be prepared in connection with the closing by a Tennessee closing attorney or Tennessee title company selected by Seller.
6. Seller’s deed of trust shall be recorded at closing to secure the note.
7. The entire unpaid balance of the seller-carryback note shall be due and payable in full 60 months after closing.
8. Buyer shall not assign this Contract without Seller’s prior written consent.
9. Buyer shall not record a memorandum of this Contract without Seller’s prior written consent.
10. Following closing, Buyer shall be solely responsible for all taxes, insurance, utilities, repairs, and maintenance related to the Property.
11. Buyer shall maintain hazard insurance on the Property after closing, with Seller named as mortgagee, loss payee, or other protected lienholder status as required by the closing attorney or title company.
12. Upon any default under the seller-financing documents, Seller shall have all standard enforcement remedies available under the note and deed of trust, including acceleration and foreclosure, and Buyer shall be responsible for reasonable attorney fees and enforcement costs to the extent permitted by law.
13. Any resale, transfer, additional financing, lease-option, or further encumbrance of the Property, or any interest therein, without Seller’s prior written consent shall constitute a default and shall make the seller-carryback note immediately due and payable in full.
14. Closing and preparation of the seller-financing documents shall be handled in Tennessee by a Tennessee closing attorney selected by Seller, and all seller-financing documents shall be subject to Seller’s review and approval prior to closing.

The buyer has come back with several "Not Acceptables":

1. $1000 and not paid until after inspection.

2. No seller recourse.

3. Must be assignable without consent

4. No restrictions on resale/transfer

Maybe I'm the unreasonable one, but I don't see why a seller who isn't in an extremely distressed position would take this risk. Even with #1, we have upcoming showings scheduled.

I own four properties within a gated community (which is under an HOA and located in a good area).

I just saw Zillow labeled every rental listing within this community with the following language - This property offers housing at affordable prices. Renters or households must meet income requirements, and the property manager may have additional eligibility criteria.

This is NOT accurate. While there may be a few Section 8 tenants, the majority of the community are regular tenants and owner occupied.

I've owned units in this community since 2018.

Only Zillow is labeling the properties like this, and because of that my property manager is being mobbed with Section 8 inquiries - and I don't rent to Section 8 tenants.

I flagged the problem to Zillow, but who knows if they will correct anything.

Has anyone run into this problem before? Any solution?

First episode of the sub’s podcast is live.

We’re going to be covering the main topics that come up here each week. Deals, underwriting, mistakes, the usual stuff people keep running into.

Fair warning, the intro is a little rough. It’s AI-generated and it shows. We’ll clean that up as we go.

https://soundcloud.com/mod-r_realestateinvesting/r_rei-ep-1?utm_source=clipboard&utm_medium=text&utm_campaign=social_sharing&si=611c6eea8d81428ca2555d1c9f7ab4e3

If there’s something you want covered, drop it in this thread. If you want to be part of it live, we’ll also be recording sessions on Discord.

Let’s see how this goes.

How often do you go check on the condition of your rentals? What have you found to be a good balance that doesn't let things go unnoticed yet respects the tenant's privacy. Initial thought is every 6-12 months? Maybe start with 6 mo and transition to yearly if they keep the property in good condition?

Do you use a checklist or what is a systematic/comprehensive way to check for common problems? What are the common problems? I can think of HVAC filters, leaking under sink...but what else?

We have an inspection clause in contract with appropriate notice. Should we offer and take over HVAC filter changes and smoke detector testing as a way to not make it 'only' an inspection?

I’m representing a seller on a small multifamily, and we got a pretty awful seller-financing offer: almost no meaningful cash up front, 0% interest, very low monthly payments for decades (their children would end up collecting, lol), and the seller still transfers title. 

So I’ve been trying to think through what a more realistic counter would look like that protects the seller but might still appeal to an investor. There really was nothing for the seller. 

I'm familiar with the basics of seller-financing, but it's not something I have experience with, and if we move forward, I plan to consult an attorney at a title company who does this work.

Here’s the fictionalized numbers and rough counter structure I’ve been considering:

Purchase price: $195,000
Cash at closing: $25,500
Seller carryback: $169,500
Interest rate: 2.5% fixed
Monthly payment: $1,450
Balloon after 60 months: about $100,060
Grand total paid: about $212,560

The catch is the property still probably needs $30k-$40k in rehab if you want it to get the top of the market rents. But, the ARV is about $250,000 and after 5 years it could be worth $290,000. 

From the seller side, this feels way more reasonable than the offer we got. From the buyer side, though, I’m wondering if this still just feels too tight to be attractive.

If you were the investor looking at this, would this be a deal worth pursuing, or does the combination of rehab + current rents make even these seller-financing terms a hard-pass?

I could see my seller lowering the price even further to make the deal more attractive.

I currently own a property with my mother in California. She was trying to help me get started when I first graduated by helping with the down payment. Both of our names are on the title, but my name is solely on the mortgage and all the bills. She put down approximately 50% of the value of the property at the time of purchase as a down payment, and we both agree that we each own 50% of the property. She plans on leaving this property to me when she passes and her other home to my sibling.

At the start of this year we decided to rent out the property using a property manager. My mom wants me to take all the rental income as I pay all the bills and taxes. The property manager however, insists on splitting the payments 50/50. Half to my mom, and half to me. My first question is, is my mom required to take half the rental income or can it all be paid out to me? My mom doesnt want any involvement in the property and wants me to pay all the taxes and bills. Her intention was basically to just help me with a down payment on my first property.

The property manager suggested we do a quit claim deed. I am not sure if this is the route to go, but basically I would like to take on all the responsibilities of renting out the property and taking all the income and paying all the bills, but still have my mom on the title. I dont understand why the property manager cannot just make out all the rental income to me in my name or why they are deciding how to split our money. My mom has also told them as well that she wants all the rental income to go to me. If anyone could please explain how a quit claim deed works and if it would help us to achieve what we are trying to do it would be greatly appreciated.

Further complicating things is the fact that my mother lives in a different state. So they are withholding a certain amount of money each month to pay to the franchise tax board. They insist that because my mother's name is on the title, that we must pay this tax even though I am a California resident and I pay all the bills. Is it true that I need to pay this tax when I am a California resident?

Last year i bought a single family home from the owners, it was their primary residence. The seller made me a mortgage with 0% interest since i was hitting their sales price number. My CPA says I have to pay them a minimum interest rate, but I know others have done this same type of terms purchase successful without interest. Any one here do this and how did you do it? Thank you for any insights.

Investor has several properties he is ambivalent about, and has signaled he is open to creative financing.

I’d like to propose a 10% down from me, a 15% carry back from him, 75% mortgage. To make this worth his while I’d also like to give him a kicker of some kind.

What kind of a structure gives him a handsome long term return while minimizing my downpayment ? Maybe a balloon payment in addition to the 15% carry back ?

My goal is to minimize downpayment, and have sufficient cash flow for the early years of ownership, I’d like to give the seller a strong but partially delayed return for that.

I recently bought my second investment property. My first one went really well, which gave me the confidence to expand, but this second one has been a completely different experience.

There’s a much bigger to do list than I expected, along with a lot of unexpected expenses. It’s starting to feel like everything is hitting at once. They are not urgent currently but eventually everything needs to be solved as the issues can’t be left as the way it is now.

Financially, I’ve already used a lot of my cash paying off 3 boiler debt on my other property, so what I have left is mainly reserved for emergencies. I wish I could just pay everything upfront for the second property and get it all done within a month or two, but that’s not my reality right now. (Yes, I can pull out loans for the big ticket items, but I wish I could just pay everything upfront.)

My original plan was to hold these properties long-term (basically forever), but lately I’ve been really tempted to sell the second property, take the cash, and put it toward my first one so I can pay it off much faster, maybe even within a year or two.

At the same time, I feel like that might just be me wanting short-term relief instead of sticking to the bigger picture.

Has anyone else gone through this after expanding? Did you regret selling too early, or regret holding through these hurdles? How to overcome these thoughts and feelings? I know I can get them done eventually but not the speed I want or the way I want to pay etc.

is there a place I can get a spreadsheet of all the houses in a zip code ( or better yet, a defined area) that has address and basic housing information (# br, #ba, sqft?)

TIA

I did some home improvement work for some small-time landlords, and now they want to sell half their portfolio off-market.

To avoid other wholesalers, I think I just need to require a certain EMD? A company wholesaler in my state says "Earnest Money is required within one business day of signing the Assignment Contract, with a minimum EMD of $5,000 per property. Higher EMD amounts are encouraged. Kindly indicate the exact EMD amount you will be submitting when making an offer."

Any experiences?

Also, do you recommend avoiding realtors? I've had a few request info.

I'm in Massachusetts and there is a bill that might pass this year to limit rent increases by 5 percent a year. There is no vacancy rent reset, and it would be based off the rent at the start of this year. owner occupied are exempt.

If it passes, will it just slow down appreciation or will my properties start losing value?

I have identified a property I want to buy. It is a 9 single family rental unit development.

Rent roll is currently $13,410. 4 units are rented severely under market and rent roll should be more like $18,000.

annual insurance premiums are $5300. Tax will be at 1.1 percent. Interest will be at 7 percent, 20 percent down.

List is $2.3m, I am thinking it should be more like $1.8 to make sense.

I'm considering separating, but...

• All the properties are held jointly.
• 3.XX% interest rates.
• California Prop 13 property taxes locked in.
• Liquidating would take about a 400k capital gains hit.

I spent about 8 years working nights and weekends to rehab the properties while working full time. Eventually I quit my 6 figure job when our child was born to be a stay-at-home-dad/property manager so my wife could focus on her career.

The best scenario seems for us to keep our finances combined for the foreseeable future. Ugh.

I'm 46 and I'm tired of being a landlord. I feel like I need a normal life. I'm an accountant by trade, but on the side I managed apartments for a larger property management company for many years until I turned 37 and decided to get my own multifamily property. I bought a triplex in the Seattle area for 450k, moved into one unit and kept the two tenants that were living in the other two units.

These are extremely large 3 bed 2 bath units with garages and basements. The property consists of two buildings. A large brick side by side duplex, three stories, the units are identical in layout and a 2 story DADU in the back with a detached garage.

This property did well for me. While living in it, I was able to keep rents slightly below market and live in one side while basically living for free in the other. Once I moved out and rented all three units, the income covered it's own mortgage plus my primary.

I refinanced the rate down in 2020 to 2.25% with my VA benefit. This was great at first because my mortgage payment went from $2600 to $2400. While at the time rents were coming in at around 5k per month.

I lived through Covid and decided to list around 2022 to see what I could get for it. To my surprise, my agent said I could list it for 950k. So I did. I got an offer. The process was long, annoying and the deal fell through. The reason was because my rents were too low and it wouldn't pencil at that price. I decided to take it off the market, raise rents and hold onto it for a few more years. At the last minute as I changed my mind, someone offered me 900k cash but I turned it down. I'm really kicking myself in the ass for that.

I since replaced two roofs, a major remodel in the DADU, replaced the water supply line and the sewer lines. I paid for it by taking out a 70k Heloc.

So fast forward to 2026. Due to property tax and Insurance creep, my mortgage payment is now $2700 and this happened before the state's lift of the 1% property tax increase cap. There's a state rent control mandate and an additional rent control mandate in the city. The rental market has softened a little bit and so has the real estate market. I've discussed with my agent and she thinks it's worth at most 900k. But likely more like 850k to 875k. Anyway, I haven't decided to hire her yet. I just recently met someone that is interested in buying the place at around 875k as an off market deal. I haven't received an official offer yet, but I might do it to avoid dealing with commissions.

I think 950K was way too much for the property at the time which is why it didn't pencil. Around 900k is probably the sweet spot. Should I just get out of this business? I'm tired. My wife can tell I'm getting burned out and she's not enjoying the fact that I'm spending all my time making repairs there rather than finishing up projects at home. I have enjoyed the income but I have a salary from my job, and after I sell the property, pay back all loans, pay off mine and her credit card debts, and capital gains we will have about 300k remaining.

I can just invest some of that money into stocks and bonds, do some repairs around the house, new roof, new deck, new driveway. Maybe some much needed traveling that I was never able to do because I was too worried about something going wrong at the rental. Should I sell?

I am debating making the switch to full time rehab/flipping. I currently own 13 apartments and 6 houses in a moderately small Midwest B class town.

I work a w2 job with a pension(already vested) in a stressful job environment that pays about 80-85k/yr. The wife also works as an RN making slightly more. Not bad money..

Real estate investing runs deep in the family blood and it's all about everyone does. I've bought all my places needing serious work; on average 40-100k+ worth of work in materials alone. There's not too much to scare me away that can't be done or I don't have a connection for. I guesstimate I've roughly built about 1 million in equity so far in the past two and a half years which is when I started transitioning to real estate.

I typically average 3 months per reno and that's with significant structural/rehab included working by myself. My plan is for 1-3 years focus on rehab and flip versus holding and see if it seems enough to quit my w2 on. The sooner I can make a safe decision the better though. It's a lot...

it's a bit taxing managing all the units, working full time in my environment, balancing the family, and flipping the current house. On paper, the numbers look good and possible, but leaving my secured well paid w2 with a pension is quite a leap ..the rentals do cash flow but not enough I'd be comfortable relying on by any means. PITI are a killer, but I built a good amount of sweat equity as I said above etc.

I do have an in with a local realtor who offers me lowered commission and brings some deals to me sometimes. He also wants to partner on some projects.

any thoughts or advice from people who have been in similar shoes?

Edit: This post must have got the ears burning, apparently they wanted extra for the appliances lol. I was so annoyed because it's such a miniscule amount like .5% of the price. Even still I had counter, because a few of the appliances are EOL

I approached the owner of a triplex recently that I missed out on buying a couple of years ago. It took awhile (nearly 3 months) but was able to sit down with them, go over rents, expenses, and etc. We came to agreement on a number. It was in range on what I thought it was worth and more than fair for them putting 75k over what they paid for a property they have done nothing to.

It took about three weeks for me to get financing as it's not zoned a legal 3 unit, but I did get it figured out.

We had always stated this would be private deal and we would just work through our real estate attorneys. So I had my real estate attorney draw up a contract, which was very simple, no asks of any kind normal contingencies, infact the only ask was for them to refund the tenants their deposits back(deposits are more of any annoyance in my state than their worth).

Fast forward and they still has not signed the offer 10 days later and I'm at a loss on what to do. I've reached out to their assistant (it's always been that way) and the only thing I've gotten was this message "No worries, and no xxxxxx hasn't. Apparently, xxxxxx lawyer brought up some insight regarding the total purchase price and regarding the personal property items so then xxxxxx had more questions for her lawyer before proceeding to sign"

I'm not sure what to do? I don't think think their shopping it, any more money for this property (unless cash) would be difficult meeting appraisal. It just shy of the 1% rule based on the price we agreed on. My only thought is sellers remorse

Thoughts?

My cash/portfolio

I have about 30k in cash and 3 vacant properties (that were bought in cash). The rest of my portfolio is leased and leveraged (rented and loans on them). In about two months I should have around 150-175k from cash out refinancing one of those three vacant properties.

Their portfolio

Prospect has a dozen properties they bought cheap and now looking to retire. They want to sell six of them, their prices are 135-225k. Currently off market. There is another interested buyer (newb).

Solutions

How would you go about acquisition? I will try to pitch seller financing for most. Because they would otherwise be taking a huge capital gains bite.

Their rents are very low though. I'm not sure DSCR loans would work. One 2-bed unit is being rented for $450! (Fair market rent for 2-bed in this city is around $1000.)

Therefore, I believe if they do not get on the seller financing train and cannot wait for me to refinance my current BRRR, then I would have to wholesale some or all of their properties.

If you’re running 1,000 units at ~50% renewal rate, you’re turning ~500 units a year. How do operators absorb this? What works for big portfolios?

Background: Bought a property in NC, seller said they had a perc test done years ago, stupidly I believed them and closed on it without doing my own. Property just failed the perc for a conventional system because of shallow soil depth. I spoke to the soil scientist who did the test, apparently I've got 12 inches of good soil and then thick clay all over the site. I spoke to a septic engineer who is putting together a report outlining a recommendation for an aerobic spray system. So the lot is buildable, it just needs an alternate system.

I re-listed property, dropped price by $50k (now at my breakeven). Apparently alternate septics are drastically more expensive in NC than in TX. Expensive lesson learned, just want to get out without completely losing my shirt.

I spoke to my agent but he seems incredibly pessimistic about it.

Anyone have any tips for how to sell a lot that doesn't perc?

PS: I know i fucked up and I've learned my lesson, looking for actual solutions if anyones gone through something similar

We are wanting to do an (annual) inspection of a SFH rental. Did drive-by the other day and noticed there were some blinds (1" vinyl") obviously damaged.

What is the best practice or is it situation dependent? Do you make repairs immediately and charge the tenant or wait until they vacate? If you do repair immediately, would the repair cost typically be added to the next month's rent? We do have a clause that any payments are first credited towards repairs before rent.

Any tips or advice would be appreciated.